Is this a reasonable plan? I feel that the fixed annuity will represent a large part of my fixed income allocation and allow the remainder of my portfolio to remain in a 75/25 ratio.

Q. As you probably know, within the last 9 months several new funds have been created that seem to offer an attractive alternative to traditional mutual fund investing. The NASDAQ 100 (100 of the largest NASDAQ companies, ticker QQQ), and the SPDRs (an S&P 500 index, ticker SPY) are two examples. In addition, nine individual Select Sector SPDR funds that unbundled the S&P 500 index have also been offered. I am interested in the Select Technology SPDR, some 80 S&P 500 tech stocks, ticker XLK).

I am a buy and hold investor and I want to invest outside of my IRA accounts, so I am concerned about dividends and short term capital gains as well as fund performance. Is there any disadvantage to investing in SPDRs versus a traditional S&P 500 index mutual fund? How do you think the performance and expenses of the Select Technology Sector SPDR would compare with other Select Technology Mutual Funds?